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Strategy

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published: 28 May 2018

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Abstract:
Jean-Marc Frangos, Managing Director of Products & Services Research and Open Innovation at BT Group is looking to optimize the London-based telcom company’s external innovation process – scouting for new technologies from Silicon Valley, Israel and Asia. Having taken on responsibility for some of BT’s internal research labs in 2017, he needs to boost synergies between internal research and external innovation, and to evaluate how these will play out in the future for telecom companies and the implications for BT.
Please visit the dedicated case website to access supplementary material.

Pedagogical Objectives:
To explore (i) how multinational firms access and integrate external technologies from various places across the globe, (ii) the challenges of integrating external knowledge, (iii) the management of synergies between organizational units / sub-domains, (iv) the evolution of the competitive environment and its implications for firm strategy.

Keywords:
Global Open Innovation, Global Strategy, Technology Scouting, Silicon Valley, Telecoms, Partnerships Large Firms and Start-Ups, Knowledge Management, Digital Transformation, Innovation Clusters

published: 28 May 2018

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Abstract:
PopChef is a start-up foodtech business in the lunchtime food delivery market in Paris. The case centres on the period from launch in 2015 to 2017. PopChef is the first to enter the market with a new business model in France. As other well-funded domestic and international entrants arrive, the market becomes highly competitive market. PopChef aims to counter this by shifting from a technology-based company to a virtual food company. Will this be enough to ensure its survival?

Pedagogical Objectives:
The teaching objectives relate to the firm’s strategic direction. The first is to compare and contrast diverse business models – including platforms and vertically integrated virtual restaurants. The second is to address how new players stimulate demand and develop the market, yet also intensify the competitive pressure. The third is to trace PopChef’s development over time as it adapts to changing conditions and seeks new sources of competitive advantage. PopChef’s changing fortunes provide an engaging context in which to address these issues.

Keywords:
Foodtech, Food Delivery, Start-Up, Marketing, Platform, Digital, User Experience, Distribution, Strategy, New Market Model, Algorithm, Culture, Virtual Restaurant

published: 23 Apr 2018

  • Topic: Strategy
  • Region: Global

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Abstract:
This note is an introduction to the macro (or general) environment and strategy tools (PESTEL analysis, scenario development) used to analyze it. It provides templates for the application of these tools in strategic analysis. The note also discusses the benefits and limitations of macro environmental analysis, as well as the role it plays as a part of the overall strategic analysis of the business environment.

Pedagogical Objectives:
To provide conceptual support and an integrated framework for the diagnosis of the business environment in basic strategy courses (undergraduate, graduate, executive education).

Keywords:
Macro Environment, Pestel Analysis, Environmental Scenarios, Market Size / Growth Analysis, Demand Shifters, Business Environment, Competitive Strategy, Pest Analysis, Environmental Scanning

published: 05 Apr 2018

  • Topic: Strategy
  • Industry: Motion Picture & Television
  • Region: North America

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Abstract:
The Marvel Way: Restoring a Blue Ocean explains one of the greatest turnarounds in modern business history. This case comes with a two-part video interview with then Marvel CEO Peter Cuneo who turned around the business and launched a blue ocean. Founded in 1939, Marvel Comics initially struggled in a red ocean producing primarily me-to knock-off comic books. In the early 1960's Marvel took a blue ocean turn by focusing on noncustomer college students. Marvel invented characters that were people first and superheroes second: Spider-Man, The Hulk, Iron Man, the X-Men. The business thrived. By the 1980's value extractors took over Marvel, badly misaligning value, profit, and people. In late 1996 Marvel filed for bankruptcy, a victim of red ocean management practices. New management purchased the business out of bankruptcy in 1998 but faced a daunting task: Marvel owed $30 million in annual interest payments on a $250 million loan, cash was so tight that they almost missed payroll, and movie rights for many of their best characters were licensed to others. First managers stabilized the business then Marvel created a new type of blue ocean that went on to produce the most profitable movie franchise in history. Just over a decade after exiting bankruptcy a debt-free Marvel sold itself to Disney for $4.2 billion. Exclusive two-part video interview with CEO Peter Cuneo and Lecture Slides can be obtained from https://www.blueoceanstrategy.com/teaching-materials/marvel/
Available in English, Chinese, Spanish and Korean.

Pedagogical Objectives:
Learn how to use Blue Ocean Strategy to pivot from a red to a blue ocean. Teach the importance of aligning value, profits and people. Explain the difference between value extraction and value innovation, and the financial and ethical ramifications of each.

Keywords:
Bankruptcy, Business Ethics, Blue Ocean Strategy, Strategy, Movie, Film, Television, Turnaround, Carl Icahn, Ike Perlmutter, Disney, Comic Books, Movies, Superheroes, X-Men, Marvel, Motion Pictures, Movies, Competition

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published: 26 Mar 2018

  • Topic: Strategy
  • Industry: Smartphone industries
  • Region: Asia

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Abstract:
The case focuses on China’s ‘furious five’ smartphone makers – Huawei, Xiaomi, Lenovo, and OPPO/Vivo, charting the history of the industry and the changing dynamics of the global market. It explains the emerging market context in which these companies operate, its distinctive features, opportunities and challenges, and the various ways they have triumphed over established global brands. The case provides a detailed introduction to the respective Chinese smartphone makers and their products. It discusses their current strategies and how they were influenced at the formative stage by the background and experience of the respective founders. It examines their development trajectories to shed light on their global strategies in the future. Given its dynamic growth and intense competition, China’s smartphone market offers an ideal setting to analyse the competitive heterogeneity of firms in an emerging market context.

Pedagogical Objectives:
The case has proved suitable for discussion of any or all of the following topics: 1. Historical development, current status and future trends of the global and Chinese smartphone industry and market 2. Competitive strategies adopted by major smartphone vendors in China 3. Sources and implications of competitive heterogeneity between China’s smartphone makers It can be used together with the INSEAD case #6269 “A Dark Horse in the Global Smartphone Market: Huawei’s Smartphone Strategy”, which offers further details for analysis of the global smartphone industry and sources of Huawei’s competitive advantage.

Keywords:
Smartphone Industry, Competitive Strategy, Huawei, Huawei, Oppo, Vivo, Xiaomi, Lenovo, Origin of Strategy, China, Emerging Market, Industry Evolution and Dynamics, Strategy Dna, Competitive Heterogeneity, Experience of Founders

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published: 23 Mar 2018

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Abstract:
The Swiss company TAG Heuer, maker of luxury watches, is part of the LVMH group (Moet Hennessy Louis Vuitton). In 2015, CEO Jean-Claude Biver is deciding whether to launch its first-ever fully connected Swiss watch, manufactured in partnership with Google and Intel. Entering this new market presents an unprecedented challenge: making a watch based on a technology (microprocessors) that the Swiss have not mastered. Is TAG Heuer ready to compete in the digital space - and potentially without the traditional 'Swiss Made' label? Case B takes up the story following the successful launch of the TAG Heuer connected watch. Sales are beyond all expectations for the luxury Swiss watchmaker and its partners Intel and Google. There are a few surprises too – the consumers are older than they expected and the watches sell out far quicker than anticipated – hence the company runs into some supply chain issues.

Pedagogical Objectives:
To learn how a nation achieves international success in a specific industry and how multinational corporations enable the emergence of clusters and benefit from them. In particular, how the Swiss luxury watch industry (in particular TAG Heuer) reacted and dealt with the challenge from connected watches such as the Apple Watch. Four key issues are addressed: 1. The importance of the 'Swiss Made' label for this market. 2. How to make a connected watch 'eternal' in the spirit of traditional mechanical watches. 3. How TAG Heuer prepared for a profound digital transformation by learning from the technology cluster in Silicon Valley (locating a team of engineers there and managing the partnership with Google and Intel). 4. How a company dealt with digital disruption in a conservative industry – Swiss watchmaking. 5. How multinationals identify technology in other clusters – “technology scouting” - and set up relevant processes.

Keywords:
Watches, Luxury, Wearables, Connected Watches, Digital Transformation, Google, Intel, Clusters, Jean-Claude Biver, Global Strategy, Digital Disruption, Apple Watch, Swissmade, Silicon Valley, Switzerland

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published: 23 Mar 2018

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Abstract:
The Swiss company TAG Heuer, maker of luxury watches, is part of the LVMH group (Moet Hennessy Louis Vuitton). In 2015, CEO Jean-Claude Biver is deciding whether to launch its first-ever fully connected Swiss watch, manufactured in partnership with Google and Intel. Entering this new market presents an unprecedented challenge: making a watch based on a technology (microprocessors) that the Swiss have not mastered. Is TAG Heuer ready to compete in the digital space - and potentially without the traditional 'Swiss Made' label? Case B takes up the story following the successful launch of the TAG Heuer connected watch. Sales are beyond all expectations for the luxury Swiss watchmaker and its partners Intel and Google. There are a few surprises too – the consumers are older than they expected and the watches sell out far quicker than anticipated – hence the company runs into some supply chain issues.

Pedagogical Objectives:
To learn how a nation achieves international success in a specific industry and how multinational corporations enable the emergence of clusters and benefit from them. In particular, how the Swiss luxury watch industry (in particular TAG Heuer) reacted and dealt with the challenge from connected watches such as the Apple Watch. Four key issues are addressed: 1. The importance of the 'Swiss Made' label for this market. 2. How to make a connected watch 'eternal' in the spirit of traditional mechanical watches. 3. How TAG Heuer prepared for a profound digital transformation by learning from the technology cluster in Silicon Valley (locating a team of engineers there and managing the partnership with Google and Intel). 4. How a company dealt with digital disruption in a conservative industry – Swiss watchmaking. 5. How multinationals identify technology in other clusters – “technology scouting” - and set up relevant processes.

Keywords:
Watches, Luxury, Wearables, Connected Watches, Digital Transformation, Google, Intel, Clusters, Jean-Claude Biver, Global Strategy, Digital Disruption, Apple Watch, Swissmade, Silicon Valley, Switzerland

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Digital transformation
  • Region: South America

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Abstract:
The case presents the “leapfrogging” opportunities for Latin America brought by the digital revolution and innovation. It examines the region’s economic and commercial achievements made possible by the huge penetration of mobile vs fixed broadband. In addition, digital transformation is helping to address social issues such as financial exclusion, unemployment and healthcare. Also, by improving transparency in the system, digital has the potential to reduce corruption, one of the biggest obstacles to doing business in Latin America.

Pedagogical Objectives:
This study provides an overview of the leapfrogging opportunities that digital transformation offers Latin America as well as the challenges to be overcome for it to deliver on the promises of the digital revolution. It can serve either as a complementary case to the Stefanini case package, or as a standalone piece for instructors teaching about digital challenges and opportunities in Latin America.

Keywords:
Digital Distruption, Emerging Markets, Blockchain, Latin America, Fintech, Ehealth, Ecommerce, Smart City, Leapfrogging, Technolatinas, Digital Revolution, Digital Transformation

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Classical Music Industry
  • Region: Global

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Abstract:
For several decades, the classical music industry has been in decline with demand down, costs up and profits shrinking as many orchestras struggle for survival. Against this backdrop, André Rieu and his Johann Strauss Orchestra stand apart. Instead of competing like all the other orchestras, André Rieu has reconstructed market boundaries between classical music and pop concerts, creating a blue ocean of vast new demand. Rieu and his orchestra have stayed on the Billboard Top 25 Tours list for nearly 2 decades, right alongside the likes of Bruce Springsteen and Justin Bieber. His CDs and DVDs have sold more than 40 million copies versus 10,000 copies for a top classical music CD. This case reviews the competitive practice of the classical music industry and illustrates how Andre Rieu gained insight into unlocking new demand by looking to noncustomers of classical concerts, and how Rieu reconstructed industry boundaries and created new market space, making the competition irrelevant. The case comes with a teaching note that reviews major concepts and frameworks of competitive strategy and blue ocean strategy in the context of the case and provides answers to the questions for class discussions. Additional case material includes a lecture slide pack, and two short videos, which can be downloaded for teaching purposes from https://www.blueoceanstrategy.com/teaching-materials/andre-rieu/
The case material is available in English, Chinese and Korean.

Pedagogical Objectives:
The teaching of this case aims to 1) Identify the characteristics and limits of competitive strategic practice in the context of analyzing the conditions of the classical music industry 2) Demonstrate how André Rieu created a blue ocean of new demand in a declining industry through reconstructing market boundaries 3) Highlight the important role of noncustomer insights in enabling new demand creation 4) Drive home the key principle of blue ocean strategy – value innovation, which requires the simultaneous pursuit of differentiation and low cost 5) Review major concepts, frameworks and tools of blue ocean strategy in the course of analyzing André Rieu’s strategic move.

Keywords:
Differentiation Strategy, Value Innovation, International Business, Benchmarks, Customers, Value Creation, Blue Ocean Strategy, Strategy, Creating Markets, Classical Music, Declining Industry, Entertainment, Noncustomers, Demand Creation, Market Reconstruction, Strategic Innovation, Entrepreneurship, Differentiation, Live Performance, Strategy, Competition

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Catalog and mail-order houses; Computer processing and data preparation, Processing services
  • Region: North America

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Abstract:
On 30 May 2017, Amazon shares traded at a record high - above $1,000 - surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. Amazon recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, Amazon was ranked the world's most innovative company and the fourth largest company by market capitalization. The case explores Amazon's path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon's at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth. The case comes with teaching note, a one-page summary and lectures slides. Teaching materials can be downloaded from https://www.blueoceanstrategy.com/teaching-materials/amazon/
The case is also available in Chinese.

Pedagogical Objectives:
The case aims to understand the root of a company’s high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon’s growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points: 1) There is no perpetually excellent company – it can be brilliant at one moment and wrongheaded at another. 2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon’s unprecedented utility. 3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers. 4) Key difference between Amazon’s success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Keywords:
Order Processing, Business Failures, Innovation, Technology, Competition, Corporate Strategy, Growth Strategy, Blue Ocean Strategy, Business History, Strategic Analysis, Platform, Amazon, Failure, Market Creation, Online Retailing, Jeff Bezos, Prime, Blue Ocean Shift, Strategy, Competition

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